BP’s attempt to gain a grip in Russia’s Arctic oilfields through a £10bn share swap deal with state controlled company Rosneft has collapsed after BP failed to address a dispute and reach an agreement with its partner TNK before the midnight Monday deadline.
The Russian half of the Russian-British TNK-BP joint venture had threatened in April to file a law suit for up to $10m against its parent company BP, saying BP breached its shareholder agreement for going straight to state oil company OAO Rosneft rather than through TNK-BP.
Rosneft and BP signed a share swap deal in January which agreed the joint development of the Russian Arctic shelf and entitled Rosneft to five percent in BP in exchange for nine percent of its own shares. The deal however was blocked by AAR, the company representing the interests of four billionaires in TNK-BP, because it felt the contract with Rosneft had broken their own agreement.
TNK-BP claimed losses due to BP’s actions, saying it had lost an opportunity to explore within the Russsian Arctic and would therefore be seeking damages.